Europe’s leading mobile phone operators have dashed the hopes of telecoms equipment makers for an early sales bonanza from the launch of fourth-generation wireless networks.
Vodafone, France Telecom and Deutsche Telekom will delay spending billions of euros on rolling out 4G networks for at least two or three years, partly because they need to reassure investors about their capital expenditure plans.
Their stance is partly influenced by the need to reassure investors that they are not about to engage in a capital spending splurge during the economic downturn.
Fourth-generation wireless technology should allow documents to be downloaded almost instantaneously and videos to be watched in high-definition quality.
Trials of the main 4G technology – Long Term Evolution (LTE) – suggest it will enable download speeds of more than 50 megabits per second, which is better than many European fixed-line broadband networks.
The world’s leading telecoms equipment makers, are already braced for falling sales this year, and they will be disappointed that Europe’s leading mobile operators are not planning faster deployment of LTE networks.
Ericsson, Huawei Technologies, Alcatel-Lucent and Nokia Siemens Networks are likely to see their biggest mobile infrastructure deals in emerging markets this year. For example, China is awarding large contracts for 3G networks.
Vodafone does not envisage rolling out 4G networks until possibly 2012, partly because it thinks that third-generation technology can satisfy customers for another two to three years.
Vittorio Colao, Vodafone’s chief executive, said the company was focusing on 3G technology known as High Speed Packet Access, which will enable download speeds on mobiles of up to 14.4 mbps.
“There’s a lot of room to go on HSPA and we don’t have an urgency to go to LTE,” he said.
Didier Lombard, chief executive of France Telecom, which owns Orange, said: “The major equipment vendors are understandably keen to encourage all operators to invest early in 4G. However, the reality on the ground is that a large-scale roll-out of LTE across all our geographies is unnecessary for at least a couple of years given the headroom that still exists with 3G and 3G+.”
Hamid Akhavan, head of Deutsche Telekom’s T-Mobile division, said: “Any large-scale commercial LTE services probably won’t be deployed in Europe before 2011.”